"In recent years, the world's biggest tech companies have turned their attention to artificial intelligence (AI), an area they expect to be the next big thing. This is because AI offers the possibility of revolutionizing everything from factory operations to the development of new lifesaving drugs. All of this should result in enormous cost savings for companies, game-changing innovation, and significant gains in earnings over time."
"You might be surprised to learn that this company isn't an AI equipment maker or a cloud service provider, but instead, it's known for its leadership in social media. I'm talking about Meta Platforms , owner of Facebook, Messenger, WhatsApp, and Instagram. These apps drive Meta's billion-dollar sales thanks to advertising -- advertisers are eager to reach us across these platforms, where they know we spend a lot of our time."
"In recent years, though, Meta has expanded its business to include a major focus on AI, and that includes billions of dollars in investment annually. For the current year, Meta predicts capital expenditures, which include investment in AI, to reach the range of $70 billion to $72 billion -- that's up from earlier expectations of $66 billion to $72 billion."
Meta Platforms, a social media leader that owns Facebook, Messenger, WhatsApp, and Instagram, has underperformed the S&P 500 year-to-date while expanding heavily into artificial intelligence. Tech giants expect AI to transform industries, cut costs, spur innovation, and boost earnings. Meta has committed billions annually to AI and recently initiated its first dividend. For the current year, Meta forecasts capital expenditures of $70 billion to $72 billion, up from prior guidance, and expects capex growth to be notably larger next year with faster total expense growth. Advertising across Meta's apps remains a primary revenue driver.
Read at The Motley Fool
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